The Institutional Real Estate Inc Sponsorship brochure, Connected-Investor Focused, We connect people, data and insights, sponsorship, events, IREI Products
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NAREIM DIALOGUES FALL 2017 37 Active asset management is a critical differentiator of success in the investment management business, especially when it comes to managing commercial real estate. In particular, as we sit here in the latter half of a historically long bull run, investment performance will increasingly be driven by skillfully managing assets to drive NOI growth, as opposed to relying on yield compression. Strong investment performance not only delivers on the promise we, as trusted advisors, make to our investor clients, but it enables us to continue to raise new capital, which is the lifeblood of a growing and prosperous investment management business. In order to excel in a highly-competitive market, successful asset managers find themselves continuously having to adapt to changing market dynamics by adopting new technologies and improving upon processes that will drive efficiency. As our industry has matured over the past three decades, it has also become increasingly evident that investors today do not want to pay for inefficiency in actively managed portfolios. While change can be distracting, particularly when managing a diversified and ever-changing multibillion dollar portfolio, the willingness to embrace change can reap significant rewards, both for the client and the manager. There are times in the evolution of any business when its leaders must recognize when it is necessary to leave the comfort zone of the status quo and make dramatic, sometimes painful, changes that have the potential to plunge the business temporarily into a "distraction" phase before emerging on the other end as a more dynamic and resilient enterprise. Since joining LaSalle Investment Management in 2013, a main focus of mine has been to find ways to further enhance the firm's Americas operations. After a period of orientation with the firm, I realized there was an opportunity to bring the U.S. Asset Management function, to an even higher standard of operational functionality, in order to prepare us for an anticipated surge in growth. LaSalle's U.S. Asset Management structure, up until that time, was organized as individual, fund-specific or separate account-specific teams reporting up to each vehicle's Portfolio Manager. The groups were built organically and, over time, became siloed. While the exceptional talent that was in place was able to generate healthy returns, the structure felt fractured and inefficient, with personnel and resource redundancy occurring across property type and geography. This fragmentation impacted our technology adoption as well. When a new software tool would be developed in the market and presented to the firm for consideration, there was no central point person to assess the new tool's utility for our business and weigh in on whether or not to test and adopt the tool into our workflows. I felt that the incumbent structure ran the risk of constraining the sharing of best practices and hampering career development. What I envisioned instead was a newly centralized Asset Management function where its members would be aligned by property type specialization and would service a range of diverse investment vehicles across LaSalle, in essence morphing their interaction with Portfolio Managers from a reporting line to a client service relationship. This centralized structure was used successfully by others in the market, but I knew that fact alone would not make the change an easy sell with our team. The first step in fomenting a revolution in our Asset Management business was to commission a systematic examination, led by an outside consultant, of our org structure and efficiency metrics relative to the broader market. This study revealed that the business exhibited clear inefficiencies that needed to be addressed, especially as the business was beginning a considerable ramp-up in new capital raising and asset acquisitions that would materially expand our U.S. portfolio. ©iStock.com/DigtialStorm